Make employment in Texas easy. Let us handle payroll, benefits, taxes, compliance, and even stock options for your team in Texas, all in one easy-to-use platform.
With a larger landmass than the UK and Germany combined, Texas famously goes big — in every sense.
Famed for its vast oil reserves, iconic cowboy culture, and important historical legacies, the Lone Star State is also one of the country’s strongest economic centers. With a thriving tech scene in the state capital, Austin, and a rich, multicultural heritage that embraces diversity and creativity, Texas is an excellent destination for businesses and talent alike.
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In Texas, workers’ rights are protected by numerous employment and labour laws, at both the state and federal level. As a result, employees enjoy protection from discrimination based on age, religion, sexual orientation, gender, and race.
Here are the key things you need to know about hiring in Texas.
In Texas, the regulations and edicts around working hours and overtime are primarily covered by the Texas Labour Code.
Full-time employment is generally considered to be between 30 and 40 hours per week.
Under the federal Fair Labour Standards Act, non-exempt employees are entitled to overtime pay of 1.5x their regular pay rate if they work more than 40 hours in a week.
Employees are generally (but not always) exempt from overtime if they:
Earn more than the specified state or federal exemption threshold
Perform a role with duties that are
Work in a certified or licensed profession, such as law, accounting, architecture, or engineering
In Texas, the salary threshold for exemption is currently $684 per week, which is the federal minimum.
Note that the federal salary threshold for exemption is currently being reviewed in the US.
Remote can help you craft a competitive benefits package to attract and retain the best global talent. Our benefits experts understand the trends, requirements, and expectations of the Texan labour market, allowing your employees to feel appreciated and thrive.
Our benefits packages in Texas usually include some or all of the following:
Under the federal Affordable Care Act, organisations with a headcount of 50 or more must offer statutory health insurance to their full-time employees.
Many employers also offer some level of supplemental health insurance. While this can lead to a relative rise in employment costs, it’s an essential benefit that ensures your people have access to routine care and are covered in the event of an emergency.
Because Remote is the employer of record (EOR), it’s important for us to offer the same core benefits to all employees to ensure fair and non-discriminatory hiring practices. This protects both your business and ours.
Note that we do not add a markup on any benefits premiums or administration costs.
Employees are only legally entitled to health insurance and other benefits if they regularly work more than 30 hours per week.
No. Organisations are not legally required to offer a 401k retirement plan (or any other type of savings plan) to their employees. However, they may choose to offer this benefit as part of their overall compensation package.
Texas, like many other countries, treats self-employed individuals or contractors and full-time employees differently. Misclassification of contractors in Texas may lead to fines and penalties for the offending company.
Employment taxes and statutory fees affect both your payroll and your employees' paychecks in Texas. Note that your employees may be liable for additional local taxes.
Employer taxes
0%
Federal unemployment insurance tax (FUTA) (charged on the first $7,000 an employee earns per year)
0.00% to 6.23%
State unemployment insurance tax (SUTA)
0.0%
FICA (Social security)
0.00%
FICA (Medicare)
Employee taxes
0% to 37%
Federal income tax
0.0%
FICA (Social security)
0.00%
FICA (Medicare)
In Texas, there is no state or federal law that requires employers to provide paid or unpaid vacation leave to their employees, although many organisations do.
In Texas, there is no state or federal law that requires employers to provide paid sick leave to their employees, although many organisations do. Can an employer deny sick time in Texas? Under the federal Family and Medical Leave Act (FMLA), eligible employees are entitled to up to 12 weeks of unpaid sick leave per year, provided they: Have worked for the same employer for at least 12 months Work in a location where at least 50 people are employed by the company within a 75-mile radius
Under the FMLA, employees are entitled to up to 12 weeks of unpaid maternity or paternity leave. Some organisations opt to pay a reduced salary during this period.
Employers are not legally required to provide bereavement leave to their employees, although most organisations offer unpaid leave.
Employees must report for jury duty if summoned (unless exempt). Jurors are typically “on call” for two weeks. Do employers have to pay for jury duty in Texas? No. Private sector employers are not required to pay employees on jury service, but they must provide unpaid leave, and cannot penalize or terminate an employee on jury duty. Some employers provide paid leave.
Under federal law, employers must grant leave to employees who are members of the military or the National Guard for military duty or training. These employees have the right to take time off for their military obligations, and employers are prohibited from discriminating against them based on their military service.
Like nearly all US states, Texas is an “at-will” state. This means both employers and employees can end the employment relationship without reason, provided it is legal.
Remote’s legal experts can help you navigate terminations to ensure employees are only let go fairly, negating any potential legal complications.
Employers and employees are not required to provide notice of termination, unless otherwise stated in the employment contract.
Despite this, it's usually customary for employees to provide two weeks' notice when leaving an organisation.
Employers are not legally required to provide severance pay (unless it is stipulated in the employee's contract or in the company policy).
Employers are also not required to pay any accrued but unused vacation time, unless stipulated in the employment agreement.
There is no requirement to provide a probation period for employees, although many companies implement internal probation policies. These policies typically involve a formal performance evaluation after a specified period, such as three or six months.
Texas has a thriving economy supported by industries such as energy, technology, healthcare, and manufacturing. With state-specific payroll regulations, including no state minimum wage, no personal income tax, and right-to-work laws, employers in Texas must ensure compliance with both state and federal payroll laws. Understanding these regulations is crucial for smooth payroll operations and compliance.
Employers in Texas must adhere to both federal and state payroll regulations regarding wages, taxes, and benefits. Below is an overview of key payroll components:
Minimum wage: Texas does not have a state minimum wage, so employers must comply with the federal minimum wage of $7.25 per hour.
Overtime rules:
Texas does not impose a state income tax on wages, meaning employers are only responsible for federal income tax withholding.
However, businesses may be subject to the Texas Franchise Tax, depending on revenue and business structure.
Employers must contribute to Texas’ Unemployment Insurance (UI) program, managed by the Texas Workforce Commission (TWC).
The UI wage base in Texas is $9,000.
UI tax rates vary based on an employer’s experience rating and range from 0.23% to 6.23%.
New employers typically pay a 2.7% UI tax rate.
Texas is unique in that it does not require most private employers to carry workers’ compensation insurance.
However, businesses that choose not to provide coverage must notify employees and file a notice with the Texas Department of Insurance (TDI).
Employers who do provide coverage can obtain it through private insurance carriers or self-insurance programs.
Employers must register for a Texas Employer Tax Account with the Texas Workforce Commission (TWC).
UI tax reports must be submitted quarterly to the Texas Workforce Commission.
Payroll tax payments can be made electronically through the Texas Unemployment Tax System (TAX).
State minimum wage compliance: Texas follows the federal minimum wage of $7.25 per hour as there is no state-specific requirement.
Final paycheck rules:
New hire reporting: Employers must report new hires to the Texas New Hire Reporting Program within 20 days.
Paid sick leave: Texas does not require employers to provide paid sick leave, but some cities (such as Austin, Dallas, and San Antonio) have local ordinances requiring it for certain employers.
Payroll recordkeeping: Employers must maintain payroll records for at least three years to comply with state and federal laws.
Right-to-work state: Texas is a right-to-work state, meaning employees cannot be required to join a union as a condition of employment.
Managing payroll in Texas requires careful attention to state-specific regulations, including minimum wage compliance, UI tax requirements, and workers’ compensation laws. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.
The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be, book a demo with Remote today.
Hiring contractors in Texas can be a strategic and cost-effective way for businesses to complete projects without the obligations of hiring full-time employees. Whether you are engaging independent contractors for specialized services or bringing in subcontractors for labour-intensive tasks, understanding Texas laws and federal regulations is essential.
Remote helps businesses stay compliant when hiring contractors globally with these key features:
Global compliance support : Ensures adherence to labour laws in 200+ countries with localized contracts and proper documentation.
Misclassification protection : Includes built-in compliance checks and seamless contractor-to-employee conversion.
Centralized documentation : Maintains essential records for audits and automates tax filings (e.g., 1099s for U.S. contractors).
Legal expertise : Provides guidance on complex local labour laws, simplifying international hiring.
Remote’s streamlined approach minimizes compliance risks and simplifies contractor management for businesses.
Remote simplifies contractor payments with:
Automated processing : One-click approvals, bulk payments, recurring invoices, and real-time tracking.
Global coverage : Payments in 200+ countries, multiple payment methods, and currency flexibility.
Cost and compliance : Fair price guarantee (pay only for active contractors), built-in compliance with regional regulations, and localized contracts.
Learn more about how Remote simplifies contractor management in Texas —get startedfor free today.
Our employer of record (EOR) service enables you to hire, manage, and pay top talent in Texas with speed and simplicity.
Remote’s EOR allows your company to legally hire employees in any country or US state — including Texas — wherever your business is based, without having to set up a local legal entity.
On paper, Remote is the official employer, and we handle compliance, payroll, benefits (including equity), and other HR processes — but you maintain full control over the hire’s day-to-day management and work responsibilities.Learn more.
An EOR may be ideal if your company:
Needs to hire employees in Texas but doesn’t want to establish a legal entity there
Is testing local markets before committing to a full business expansion
Wants to ensure full compliance with federal, state, and local employment laws and tax requirements
Needs a fast, cost-effective way to onboard employees in the state
Needs a temporary hiring solution before establishing a legal entity
If your company wants to hire talent in Texas but doesn't have a legal entity there, our EOR provides a fully compliant and efficient solution. Whether you’re hiring from outside the US, or from a different US state, there are strict employment and payroll processes that you must adhere to. Our EOR service ensures you meet these legal obligations while enabling you to grow quickly.
Key benefits of hiring through our EOR in Texas include:
Faster market entry . You can hire talent quickly, without having to wait months to establish a local entity.
Full compliance with local employment laws . Avoid the legal risks associated with non-compliance and misclassification.
Simplified payroll management . We automate payroll tax calculations and ensure you are fully compliant with all federal, state, and local withholding obligations, even when laws change.
Lower costs. Setting up a legal entity in Texas can be costly and time-consuming. An EOR eliminates the need for entity registration, reducing overhead expenses.
Fewer resources required. With HR, payroll, and compliance managed by the EOR, your company can concentrate on scaling operations and assigning your resources elsewhere.
It’s also crucial to note that, at Remote, we own all our own legal entities. As a result, we don’t need to rely on third parties, which can incur delays and extra costs, and result in a negative employee experience. All our EOR services — including the dedicated support of our local specialists — are provided in-house.
To learn more — and to see our EOR platform in action — book a demo with one of our friendly experts today.
Texas is a top destination for business growth, with no state income tax, a large and diverse labour force, and booming sectors like tech, energy, and healthcare. Whether you’re a startup expanding across the south or an SMB ready to build a distributed team, managing HR, payroll, and compliance across state lines can quickly become overwhelming. That’s where a professional employer organisation (PEO) can help.
A professional employer organisation (PEO) is a third-party provider that helps businesses handle key HR functions. These typically include payroll, benefits administration, tax filings, and employment law compliance. With a PEO, your business enters into a co-employment relationship, meaning the PEO takes on the administrative and legal tasks related to employment — while you retain full control over day-to-day management of your team.
For small to midsize companies, a PEO can provide enterprise-grade HR services without the cost or complexity of building an in-house department.
As mentioned, a PEO operates through a co-employment model, which requires your company to be registered and operating in Texas.
In contrast, an employer of record (EOR) acts as the legal employer on your behalf. EORs are typically used for hiring in states (or countries) where your business doesn’t yet have a legal presence. If you’re hiring your first employee in Texas and don’t yet have an entity or tax setup, an EOR may be a better fit initially.
Working with a PEO in Texas offers several advantages, such as:
Compliance with state employment laws and tax regulations
Access to affordable, competitive employee benefits packages
Reduced administrative burden around payroll and HR documentation
Simplified onboarding, performance tracking, and employee offboarding
Minimized risk around misclassification, workplace policies, and employee relations
Texas employers must also navigate unique state laws, including workers’ compensation requirements and specific tax obligations. Remote’s PEO helps you stay compliant while keeping your HR operations lean and efficient.
To partner with a PEO in Texas, your business must have a registered legal entity in the state. Once that’s in place, our PEO service takes on your HR administration tasks such as running payroll, administering benefits, and filing local and federal taxes.
Remote’s PEO services integrate seamlessly into your operations, whether you're hiring your fifth employee or your 50th. You maintain full control over how your team works while we handle the operational complexities behind the scenes.
If your company is legally established in Texas and you're looking for a scalable way to manage HR, a PEO is an ideal solution. You’ll gain access to expert support, reduce your compliance risk, and free up time to focus on growth.
If you're just entering Texas and don’t yet have a legal entity, consider starting with an EOR and transitioning to a PEO as you scale.
Remote makes it easy to manage HR, payroll, and compliance across all 50 states. Learn more about our PEO services and how we can support your team’s growth in Texas.
A$43
per employee, per month
Robust international payroll with complete transparency
A straightforward self-service platform
Tailored assistance from dedicated specialists
Comply with local payroll regulations across every country
Integrated management of employee benefits
Comes with HR Core as standard
A$44
per contractor per month
Pay only for contractors you are actively engaging with
Engage contractors from around the world
Draft, amend and sign customised, localised contracts
Approve contractor invoices with a single click or enable auto-pay
Transparent payments with full visibility
HR Core included as standard
A$1,069
per employee, per month
Employ people in over 90 countries without setting up a local entity
Onboard with a dedicated specialist
Local payroll processed and paid punctually, every time
Built-in compliance protections
Localised, competitive and flexible benefits
Dedicated in-house experts providing local support
HR Essentials included as standard